Opinion
DOCKET NO. A-2166-14T1
04-25-2016
HELEN M. AIOSA, DIANE BEARD, MICHAEL BEARD, JOAN M. BOLAND, WILLIAM E. BOLAND, G. KEVIN CALLAHAN, ELIZABETH CAPRA, RALPH CAPRA, RICHARD G. CIOLLI, ELAINE M. CIOLLI, KATHLEEN H. COLLIS, KENNETH M. COLLIS, ROBERT CONNOLLY, BARBARA A. COX, DONALD D. DAVIS, JOSEPH A. D'ALESSIO, VICTORIA MICHAELS D'ALESSIO, DARRYL R. DWORKIN, VITA E. DWORKIN, MARY JO FAYNE, MAUREEN FAYNE, GERALD FIORELLINO, MARY ANN GARRITY, GREGORY E. GENZ, MAUREEN GRAZIOSO, CHRISTOPHER GRAZIOSO, M. COLLEEN GRAZIOSO, BRIDGET P. HART, JAMES J. HART, PEARL N. HERMANN, PAULA HOFFMAN FORD, THOMAS P. FORD, MARION M. INSABELLA, MICHAEL INSABELLA, DONNA S. KILLMER, FRANK W. LESKOWICH, MARGARET A. LESKOWICH, PHYLLIS LIGUORI, CHRISTINA C. LONGO, NEAL D. LUBETSKY, NANCY J. MACK, RAYMOND J. MACK, THOMAS J. MALLON, PATRICIA M. MAYER, RALPH D. MEADE, DELORES A. MOONEY, HARRY F. MOONEY, STEVE MOONEY, SUSIE MOONEY, MICHAEL B. MCCARTHY, VERONICA MCCARTHY, JOHN D. PERROTTO JR., PAMELA M. PERROTTO, VIRGINIA A. PETRETTI, RICHARD SNIZEK, ANN SNIZEK, KATHLEEN M. WHITE, COLLEEN M. WORONIECKI, RONALD J. MECHLER, LAUREL A. MECHLER, and KATHLEEN GALLAGER, Plaintiffs-Appellants, v. AMBOY BANK F/K/A AMBOY NATIONAL BANK, and PRC GROUP, Defendants-Respondents, and TKG MANAGEMENT, LLC and MICHAEL HERNANDEZ, Defendants.
Ronald L. Lueddeke argued the cause for appellants (Lueddeke Law Firm, attorneys; Karri Lueddeke, on the brief). James G. O'Donohue argued the cause for respondents (Hill Wallack, attorneys; Mr. O'Donohue and Wade D. Koenecke, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Lihotz and Fasciale. On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4563-13. Ronald L. Lueddeke argued the cause for appellants (Lueddeke Law Firm, attorneys; Karri Lueddeke, on the brief). James G. O'Donohue argued the cause for respondents (Hill Wallack, attorneys; Mr. O'Donohue and Wade D. Koenecke, on the brief). PER CURIAM
Plaintiffs appeal from a June 25, 2014 order dismissing their complaint with prejudice and granting summary judgment to defendants Amboy Bank F/K/A Amboy National Bank (Amboy), PRC Group (PRC), Michael Hernandez, and TKG Management, LLC (TKG). We affirm.
Although TKG is not listed as a movant on the June 25, 2014 order, the order grants summary judgment to "all parties."
Plaintiffs are condominium unit owners in Xanadu, a two-building condominium complex. Amboy financed construction of Xanadu, secured by a mortgage and security agreement. After the developer, TKG, defaulted, Amboy foreclosed and took control of the Xanadu project. Amboy engaged PRC as a property manager and real estate agent for Xanadu. Plaintiffs allege PRC misrepresented that Amboy would continue to fund repairs once all Xanadu units were sold, and defendants failed to disclose Amboy would not be providing such funding.
Since 2012, the Xanadu Condominium Association (the Association) has been pursuing litigation against multiple parties, including defendants (the Association action). In the Association action, the Association — on behalf of its unit-owning members — seeks all damages arising out of repairing and maintaining Xanadu's common elements, together with related litigation costs. To fund the litigation and repairs, the Association has made multiple special assessments against its unit owners, plaintiffs.
Xanadu at Wall Condo. Assoc. v. Amboy Bank, et al., No. L-4323-12.
In November and December 2013, plaintiffs filed a complaint and an amended complaint against defendants. Plaintiffs submitted a certification insisting the Association will not be made whole in the Association action and thus will continue to impose special assessments against its members. As a result, plaintiffs sought damages due to the special assessments they contended they would not be reimbursed for.
In January 2014, defendants moved for summary judgment for failure to state a claim, R. 4:6-2(e); plaintiffs opposed the motion. On June 6, 2014, the judge heard oral argument and granted defendants' motion. The judge primarily relied on Siller v. Hartz Mountain Associates, 93 N.J. 370, 377-81, cert. denied, 464 U.S. 961, 104 S. Ct. 395, 78 L. Ed. 2d 337 (1983), where the Court held the Condominium Act (the Act), N.J.S.A. 46:8B-1 to -38, provides only a condominium association has standing to pursue claims predicated on common-element damages. On June 25, 2014, the judge issued the order under review, memorializing the decision.
On appeal, plaintiffs argue their complaint is distinguishable from Siller because plaintiffs assert fraud claims, defendants are not developers, and plaintiffs are not pursuing common-element damages. We are not persuaded.
We review a summary judgment order de novo, applying the same standard governing the trial court. Oyola v. Xing Lan Liu, 431 N.J. Super. 493, 497 (App. Div.) (citations omitted), certif. denied, 216 N.J. 86 (2013). Under that standard, summary judgment is appropriate where, considering the evidence in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
The Act fixes the relations and rights of the Association and its unit owners, plaintiffs. The Act authorizes a condominium association to file suit against third parties for damages to common elements. Siller, supra, 93 N.J. at 377-78. A unit owner may only pursue claims regarding common elements if the association wrongfully fails to file such a suit. Id. at 380-81. Otherwise, only the association may prosecute such causes of action, and it may assess litigation costs against unit owners. Ibid. (citing N.J.S.A. 46:8B-3(e) (an association may assess unit owners to raise funds for "common expenses"); N.J.S.A. 46:8B-17 (a unit owner is "conclusively presumed to have agreed to pay his [or her] proportionate share of common expenses")). The association may then allocate recovered damages on behalf of all unit owners. Id. at 381 (citation omitted). Reserving common-element claims to an association reduces costs, facilitates repairs, fosters judicial economy, and avoids multiplicity of suits and contradictory adjudications. Id. at 379.
See also N.J.S.A. 46:8B-12 (an association "shall be responsible for the administration and management of the condominium and condominium property, including but not limited to the conduct of all activities of common interest to the unit owners"); N.J.S.A. 46:8B-15(a) ("Whether or not incorporated, the association shall be an entity which shall act through its officers and may enter into contracts, bring suit and be sued."); N.J.S.A. 46:8B-16(a) (an association "may assert tort claims concerning the common elements and facilities of the development as if the claims were asserted directly by the unit owners individually").
Here, the ultimate issue is whether plaintiffs' claimed damages relate to common elements. In their merits brief, plaintiffs specifically acknowledge their damages arise out of common-element defects:
[P]laintiffs are claiming they are entitled to recover the special assessments levied upon them by the Association for the costs of the Association's investigation of the common[-]element defects, the causes of damages to the common elements and for the repair costs and expenses which the Association does not recover through its action.Indeed, plaintiffs' amended complaint concedes the Association is already seeking "all damages, costs and expenses it incurred or will in the future incur in order to properly repair the common elements." The complaint further explains plaintiffs seek damages for any special assessments resulting from any damages the Association does not recover.
Plaintiffs' claimed damages are necessarily tied to common elements. Whether the Association is made whole in the Association action is irrelevant; the Association is the proper party in interest to pursue common-element damages, not plaintiffs. Furthermore, even if plaintiffs were permitted to prosecute common-element claims, which they are not, any recovery would equitably be transmitted to the Association to remedy the common-element defects. Siller, supra, 93 N.J. at 381.
We also reject plaintiffs' contention their Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and common law fraud claims should have survived summary judgment because they were not brought under the Act.
Anyone who has suffered an ascertainable loss as a result of any unlawful act under the CFA may file a claim. N.J.S.A. 56:8-19. An association has standing to pursue CFA and common law fraud claims premised on common-element defects. Port Liberte Homeowners Ass'n v. Sordoni Const. Co., 393 N.J. Super. 492, 501 (App. Div.), certif. denied, 192 N.J. 479 (2007).
Here, plaintiffs' claimed ascertainable losses are the special assessments. Because the special assessments arise out of common-element defects, the Association is the proper plaintiff. See Geibel, supra, 432 N.J. Super. at 74 ("Accordingly, because the Association, through its construction defect and CFA claims, sought to recover for damages to the common elements, it is unquestionably the real party in interest and therefore has standing to pursue its complaint against defendant."); see also Siller, supra, 93 N.J. at 380-81 (explaining an association has the exclusive authority to prosecute claims arising out of common-element defects). This case was ripe for summary judgment and the undisputed facts entitled defendants to judgment as a matter of law.
Although plaintiffs divide themselves into two categories — those who purchased units before Amboy obtained control of the Xanadu project, and those who purchased units thereafter — this distinction is inconsequential because plaintiffs all assert the same ascertainable losses: the special assessments. See Belmont Condo. Ass'n, Inc. v. Geibel, 432 N.J. Super. 52, 77 (App. Div.), certif. denied, 216 N.J. 366 (2013) (explaining recoverable damages would not be reduced for subsequent purchasers).
We conclude plaintiffs' argument their complaint should have survived summary judgment because defendants are not developers is "without sufficient merit to warrant discussion in a written opinion." R. 2:11-3(e)(1)(E). "[T]he clear import" of the Act is that an association has the exclusive authority to prosecute claims regarding common elements against any responsible third party. Siller, supra, 93 N.J. at 377-78. --------
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION